The Pre-Market Surge
Advanced Micro Devices (AMD) shares surged 9.15% in pre-market trading Tuesday, last trading near $214.14. The move came on elevated volume of over 6.2 million shares, signaling strong institutional interest before the opening bell.
This sharp pre-market gain follows a period of choppy trading for the chipmaker. Just last week, AMD shares fell 3.17% on February 17th and another 2.01% on February 20th, making today's rebound particularly notable.
The AI Deal Driving the Action
The catalyst for the move appears to be a significant new business agreement. Reports indicate Meta Platforms has reached a deal to purchase up to 6 gigawatts' worth of AI processors from AMD. This multi-year, multi-generation contract represents a major validation for AMD's AI chip ambitions.
For investors, this deal is a concrete step in AMD's challenge to Nvidia's dominance in the critical AI infrastructure market. The pre-market reaction suggests the market views this as a material, long-term revenue opportunity, not just a headline.
A Mixed Market Backdrop
AMD's standout gain contrasts with a broader pre-market session where decliners outnumbered gainers. Early data showed 10 stocks declining for every 5 that advanced, with an average move across all tracked names of just 0.14%.
The semiconductor sector itself sent mixed signals. While AMD soared, peer Broadcom Inc. (AVGO) was down 1.44%. This divergence suggests the move is driven by company-specific news rather than a broad sector rotation, keeping single-stock risk elevated.
- Broadcom Inc. (AVGO): -1.44%
- Nvidia (NVDA): -0.77%
What to Watch as Trading Unfolds
The key question is whether this pre-market momentum will hold through the regular session. Traders will watch for sustained high volume and whether AMD shares can maintain gains above key technical levels as the day progresses.
Investors should also monitor peer reaction. Confirmation from other AI-related chip stocks could signal broader sector strength, while continued divergence may indicate the rally is isolated to AMD on its specific deal news. The market's reaction to Nvidia's upcoming earnings, heavily anticipated by prediction markets, will also set the tone for chip stocks.
- Sustained volume into the regular session.
- Price action in peers like Nvidia (NVDA) and Broadcom (AVGO).
- Broader market sentiment, given the higher number of decliners.